Allianz Risk Barometer 2021: Pandemic outbreak overtakes Business Interruption as top business risk in China

  • 10th Allianz survey: Pandemic outbreak overtakes Business interruption as the top risk and Changes in legislation and regulation jumps seven spots and ties with business interruption to make the top three risks for businesses in China for 2021
  • Globally, Pandemic outbreak rockets to #2 from #17 and is seen as the main cause of business interruption in 2021, followed by Cyber incidents. Companies look to de-risk supply chains and boost business continuity management for extreme events.
  • In Asia Pacific, the top three risks mirror the Global rankings although Business interruption swaps places with Cyber incidents, which ranks #1 for the second consecutive year.
  • Market Developments and rising insolvency rates could also affect supply chains, with large bankruptcies expected in the US, Brazil, China and core European countries in 2021

SHANHAI, CHINA – Media OutReach – 26 January 2021 – Pandemic outbreak (#1 with 36% responses) rises six spots to be the top business risk in China, the epicentre of Covid-19, in the 10thAllianz Risk Barometer 2021. Business interruption drops one position (#2 with 33% responses), reflecting the potential disruption and loss scenarios companies are facing in the wake of the Covid-19 pandemic, while Changes in legislation and regulation jumps seven positions to tie with business interruption (#3 with 33% responses).


The annual survey on global business risks from Allianz Global Corporate & Specialty (AGCS) incorporates the views of 2,769 experts in 92 countries and territories, including CEOs, risk managers, brokers and insurance experts.


Globally, Business interruption (#1 with 41% responses) and Pandemic outbreak (#2 with 40%) are this year’s top business risks with Cyber incidents (#3 with 40%) ranking a close third, making it a trio of Covid-19 related risks.


“The Allianz Risk Barometer 2021 is clearly dominated by the Covid-19 trio of risks. Business interruption, pandemic and cyber are strongly interlinked, demonstrating the growing vulnerabilities of our highly globalized and connected world,” says Joachim Müller, CEO of AGCS. “The coronavirus pandemic is a reminder that risk management and business continuity management need to further evolve in order to help businesses prepare for, and survive, extreme events. While the pandemic continues to have a firm grip on countries around the world, we also have to ready ourselves for more frequent extreme scenarios, such as a global-scale cloud outage or cyber-attack, natural disasters driven by climate change or even another disease outbreak.”


The Covid-19 crisis continues to represent an immediate threat to both individual safety and businesses, reflecting why pandemic outbreak has rocketed 15 positions up to #2 in the global rankings at the expense of other risks. Prior to 2021, it had never finished higher than #16 in 10 years of the Allianz Risk Barometer, a clearly underestimated risk. However, in 2021, it’s the number one risk in 16 countries and among the three biggest risks across all continents and in 35 out of the 38 countries which qualify for a top 10 risks analysis. Japan, South Korea and Ghana are the only exceptions. China is the only country in Asia Pacific where Pandemic outbreak is not a new risk as it was ranked #7 in 2020.


Top Asia Pacific Risks

Similar to the global results, Cyber incidents (#1 with 41% responses), Pandemic outbreak (#2 with 39%) and Business interruption (#3 with 38%) skyrocketed to the top three business risks in Asia Pacific followed by Natural catastrophes (#4 with 27% ) rounding out the key issues in the region.


As expected, Changes in legislation and regulation (#5 with 22%) also kept its place amongst the top five Asia Pacific risks in 2021 for the third consecutive year. This was largely due to the several elections and change in leaderships that took place across the region in Singapore, Taiwan, Indonesia, South Korea and Malaysia, as well as the broader implications on supply chains as a result of China’s trade wars and greater uncertainty brought on by governments introducing tough lock down measures.


Commenting on the Asia Pacific results Mark Mitchell, AGCS APAC Managing Director, said: “The Pandemic has demonstrated just how vulnerable the world and businesses have become to unpredictable multi-country events and this has forever changed the risk landscape for clients and society more generally. The COVID-19 pandemic has not only changed our society, but has also fundamentally changed the way businesses operate, especially the acceleration towards greater digitalisation driven by more companies working remotely. Our hope is that businesses and clients can learn from their experiences in 2020 and make sure they have in place measures which will reduce the impact of similar events in the future.”

Top China Risks


In China, it’s no surprise that Pandemic outbreak topped the list as China was the epicentre of Covid-19 where the virus was first detected at the end of 2019. Business interruption is a close second as individual companies and even entire sectors suffered large business interruption events during the nationwide lockdown as a result of the pandemic and it’s the largest catastrophic event to hit a modern, globalised and interconnected economy.


In response to heightened BI vulnerabilities, many companies are aiming to build more resilient operations and to de-risk their supply chains. According to Allianz Risk Barometer respondents, improving business continuity management is the main action companies are taking (62%), followed by developing alternative or multiple suppliers (45%), investing in digital supply chains (32%) and improved supplier selection and auditing (31%). According to AGCS experts, many companies found their plans where quickly overwhelmed by the pace of the pandemic. Business continuity planning needs to become more holistic, cross-functional, and dynamic, monitor and measure emerging or extreme loss scenarios, be constantly updated and tested and embedded into an organization’s strategy.


Changes in legislation and regulation jumps seven positions to tie with business interruption as trade wars and tariffs intensify amidst growing economic sanctions and protectionism. In the last two years, the proportion of Chinese exports to the US subjected to additional tariffs has soared from a nearly insignificant share to over 70%. And the share of US exports to China subject to tariffs has skyrocketed, from 2% in February 2018 to more than 50% two years later.


Market developments ranks fourth in both the China (29%) and Global (19%) rankings reflecting the risk of rising insolvency rates following the pandemic worldwide. According to Euler Hermes, a trade credit insurance subsidiary of the Allianz Group, there are two clusters of countries, those that will see a stronger rise in insolvencies in 2020, and those that will see a delayed surge in 2021. The bulk of insolvencies will come in 2021 as Euler Hermes’ global insolvency index is expected to hit a record high for bankruptcies, up 35% by the end of 2021, with top increases expected in the US, (up 57% by 2021, compared to 2019), Brazil (up 45%), China (up 40%) and core European countries such as the UK (up 43%), Spain (up 41%), Italy (up 27%), Belgium (up 26%) and France (up 25%).


Most Asia Pacific countries are in the first group (China, Japan, South Korea, Taiwan, Hong Kong and New Zealand, with India as key exception) mainly because they were the first to be impacted by the Covid-19 outbreak. The earlier economic recovery of the region will help limit the rise in insolvencies for 2020, but the stricter and/or longer lockdown measures will also cap the recovery and keep companies under pressure up to 2021, when the region will see another rise in insolvencies. China tops the list and it is followed by Singapore (+39%), Hong Kong (+23%), Japan (+13%) and Australia (+11%).


Patrick Zeng, CEO of Hong Kong & Greater China & Regional Director of Distribution for AGCS said: “The silver lining to the pandemic and the economic challenges that follow is that it will likely spark a period of innovation and market disruption. We anticipate the accelerating adoption of technology, hastening the demise of incumbents and traditional sectors, giving rise and opportunities to new companies and the way business is done. As a leading partner in risk management we look forward to strengthening our business relationships and facilitating this transformation.”




More information on the findings of the Allianz Risk Barometer 2021 is available here:

About Allianz Global Corporate & Specialty SE

Allianz Global Corporate & Specialty (AGCS) SE is a leading global corporate insurance carrier and a key business unit of Allianz Group. We provide risk consultancy, Property-Casualty insurance solutions and alternative risk transfer for a wide spectrum of commercial, corporate and specialty risks across 10 dedicated lines of business.

Our customers are as diverse as business can be, ranging from Fortune Global 500 companies to small businesses, and private individuals. Among them are not only the world’s largest consumer brands, tech companies and the global aviation and shipping industry, but also wineries, satellite operators or Hollywood film productions. They all look to AGCS for smart answers to their largest and most complex risks in a dynamic, multinational business environment and trust us to deliver an outstanding claims experience.

Worldwide, AGCS operates with its own teams in 31 countries and through the Allianz Group network and partners in over 200 countries and territories, employing over 4,450 people. As one of the largest Property-Casualty units of Allianz Group, we are backed by strong and stable financial ratings. In 2019, AGCS generated a total of €9.1 billion gross premium globally.


Twitter: @AGCS_Insurance

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